Photo by Kaleidico on Unsplash
When life throws problems your way, it’s natural to think you just need the right tool to solve it. This is no different in customer service.
“My organization needs a good chatbot.” “We need to invest in a knowledge base.” “My company is considering an online community.” Statements such as these stem from legitimate requirements to reduce costs, increase efficiencies, or better connect with customers. Other drivers might be customer feedback, competitive pressure, or leadership decree. All are valid and important reasons to evaluate new tools.
The problem is that every one of these statements cater to improving how customers’ issues are addressed but fail to address why customers are contacting customer service in the first place. The distinction is significant because only one will ultimately improve the customer experience.
Addressing the “how” is important…
Customers purchase products and services and expect them to just work. When they don’t, it’s a disruption to their experience and they seek a solution. Customer service exists to get them back “on track”–to put the customer back on their journey.
Having the appropriate service channels they expect is critical. Since most customers begin their search for a solution online, it’s important to have the right self-service tools–in the form of chatbots, knowledge management, and communities, for example–available. Not only does self-service provide a convenient option for customers, but it’s also efficient and cost-effective.
… because it can save money …
The cost-savings of chatbots or knowledge bases can be appreciable. Rather than addressing that same issue over-and-over by telephone at $20 per call, offering the solution via self-service can reduce the cost to perhaps mere pennies.
Consider this example: a customer service center receives a total of 300 inquiries each day about a particular problem over their live service channels–telephone, chat, and email. Let’s assume for simplicity’s sake the cost of responding to that one issue every day across all support channels costs $2,500. Adding lower-cost and higher efficiency channels such as chatbots, a knowledge base, and communities can help to reduce that daily cost–say it lowers the cost down to $1,000 per day.
Slashing costs by 60% is impressive. The problem is those 300 requests have not gone away; that’s still a $30,000 per month cost to the business on this one issue. If the company sells more products and services, that number goes up.
This is an example of just one recurring issue. Most companies have multiple common problems affecting customers. Relying on self-service alone misses the opportunity to have an even greater impact.
… but the “why” has incalculable savings!
There is a better approach. It requires working collaboratively with other teams in the company to permanently address the true cause of problems. Only the teams outside customer service–manufacturing, engineering, finance, legal, and others–can do this. From the example, were the company to eliminate that one issue, it would save over $300,000 per year–and this is just one issue! In what better ways can that money be used?
The numbers add up quickly, but it’s the other outcome of taking this approach that’s even more impactful. By eliminating problems, the customer experience improves because future customers will never encounter the issue and their trust in the company will be greater. This is powerful because a Bain study found that increasing customer retention rates by just 5% can increase profits by 25% or more. Customer retention also has the effect of reducing costs since it’s 5 to 25 times more expensive to acquire a new customer vs. retaining an existing one.
Are you ready to permanently address customer problems and drive ongoing improvements to the customer experience? Two things are necessary to make this approach successful. First, a “customer first” culture must exist that reinforces the importance of teams working cooperatively with customer service. Second, a collaborative service platform is needed that allows customer service to easily work with other teams to triage customer problems, assign issues to the proper team, and track problems to resolution. Yes, a tool–workflow–is ideal here as it keeps the issues visible, the progress ongoing, and each team accountable using a standardized and repeatable process.
The power of “why”
Most customer service organizations are focused on addressing customer questions and problems in the most cost-effective and efficient manner possible. Savvy companies realize there is much more at stake than just faster answers at the lowest possible cost because as customers encounter problems, their experience erodes. It might be only by a bit, but over time that erosion will end up costing a company more than just answering a phone call or offering a knowledge base: it reduces the likelihood the customer remains a customer.
There is a better way. Companies must go beyond simply responding to customer inquiries and unite the teams throughout the organization to identify and address the underlying reason customers are contacting them. Using this strategy, the customer experience improves and the company will prosper.